42 State AGs Demand that Meta Cracks Down on Facebook Investment Scams

A group of 42 state attorneys general is urging Meta Platforms (META) to take stronger action against investment scams on Facebook, which falsely use images of Warren Buffett, Elon Musk, and Ark Invest’s Cathie Wood to trick users, according to New York Attorney General Letitia James. In a statement on Wednesday, James said that scammers are regularly bypassing the social media company’s automated and human review systems in order to post fake ads, which continue to cause millions of dollars in losses for retail investors, despite repeated reports to Meta.

The ads lure Facebook users to WhatsApp chat groups, where they unknowingly become targets of alleged pump-and-dump schemes. In these schemes, criminals artificially inflate the prices of thinly traded stocks and sell them at a profit to unsuspecting victims, leaving retail investors with substantial losses. According to The Wall Street Journal, Meta’s platforms have become a “cornerstone of the internet fraud economy.” And the issue is global, as an Australian billionaire is currently suing Meta after alleging that its AI-driven ad platform promoted false ads using his image.

As a result, James and the bipartisan coalition of attorneys general—including representatives from California, Connecticut, Georgia, Massachusetts, Michigan, New Jersey, and Pennsylvania—are calling on Meta to increase its ad monitoring, especially through more human review. They warned that if Meta fails to curb the scams, it should stop running investment ads entirely. “Thousands of Facebook users have lost hundreds of millions of dollars to these scams,” said James, as she urged Meta to act and warned the public to be careful with investment ads seen on social media.

Is Meta a Buy, Sell, or Hold?

Turning to Wall Street, analysts have a Strong Buy consensus rating on META stock based on 42 Buys, three Holds, and one Sell assigned in the past three months, as indicated by the graphic below. Furthermore, the average META price target of $698.07 per share implies that shares are fairly valued.

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